DPW Holdings’ CEO and Chairman, Milton “Todd” Ault, III said, “Our actual second quarter results, which are consistent with the preliminary results we announced on August 15, demonstrate that we continue to execute our stated strategic plan to create a diverse portfolio of assets with global growth potential. Coolisys’ order book continues to improve, giving us additional confidence in the growth potential of its advanced engineering, design and manufacturing businesses. As we position the company for continued expansion in 2019, we intend to continually evaluate our diverse portfolio of assets, seeking opportunities to capitalize on new market opportunities in advanced technologies and manufacturing, as well as monetize existing assets for the benefit of all DPW Holdings’ shareholders.”

Second Quarter and First Half 2018 Results of Operations

Second quarter gross revenue was $7.4 million, a 309 percent increase from $1.8 million in the second quarter of 2017 and 43 percent increase from $5.2 million in the first quarter 2018. First half gross revenue was $12.6 million, a 266 percent increase from $3.5 million in the first half of 2017.

Second quarter gross margin was 18.3 percent, compared to 40.1 percent for the second quarter of 2017. First half gross margin was 21.8 percent, compared to 41.7 percent in the first half of 2017. Cryptocurrency mining revenues during the second quarter were lower than the operating costs of the company’s mining operation, which primarily consist of colocation costs and depreciation.

Second quarter net loss was $7.0 million, including non-cash charges of $4.3 million, compared to net loss of $1.9 million for the second quarter of 2017, which included non-cash charges of $1.0 million. First half net loss was $13.1 million, including non-cash charges of $8.5 million, compared to net loss of $2.8 million in the first half of 2017, which included non-cash charges of $1.4 million.

Order backlog at the Company’s Coolisys subsidiary totaled $74.4 million at August 20, 2018.

June 30, 2018 Balance Sheet

Total assets increased by $14.9 million, to $53.4 million, compared to total assets of $38.5 million for the quarter ending March 31, 2018.

The Company’s investment portfolio as of June 30, 2018 included an investment in convertible promissory notes, warrants and shares of common stock of $7.7 million in Avalanche International Corp dba MTIX International, Inc. Under GAAP accounting rules, the value of the warrants and shares of common stock are marked-to-market on a quarterly basis, which can result in significant fluctuations reflecting the volatility of the underlying market.

During the quarter ended June 30, 2018, the Company generated a total of $719,000 from its cryptocurrency mining operations and used $605,000 to pay down its convertible debt and $201,000 to invest in additional miners. The company is closely monitoring cryptocurrency market conditions and believes it has the capacity to have approximately 10,000 miners deployed by December 31, 2018, subject to available financing and more favorable Bitcoin pricing.

Total stockholders’ equity at June 30, 2018 totaled $31.5 million, an increase of $9.7 million compared to total stockholders’ equity of $21.8 million for the quarter ending March 31, 2018.

Full Year 2018 Gross Revenue Guidance

On August 15, 2018, the Company updated its fiscal year 2018 gross revenue expectation to between $34.0 million and $39.0 million, compared to its previous guidance of $44 million to $49 million. The Company’s updated guidance includes the assumption that its cryptocurrency mining operations will continue to operate at current levels and that Bitcoin prices remain depressed at between $6,000 and $6,500 during the second half of 2018. In addition, guidance was reduced to adjust for the fact that the Company’s acquisitions of Enertec Systems and I.AM, Inc. closed later in the second quarter than originally anticipated. The Company estimates that its current annualized gross revenue run-rate is approximately $40 million.

The Company hosted a conference call at 5:00 p.m. ET on Wednesday, August 15, 2018 to discuss its preliminary second quarter results, provide a business update and answer questions. A replay of the webcast is available at www.dpwholdings.com under the Investor Relations section.

About DPW Holdings, Inc.

DPW Holdings, Inc. is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies that hold global potential. Through its wholly owned subsidiaries and strategic investments, the company provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, telecommunications, medical, crypto-mining, and textiles. In addition, the company owns a select portfolio of commercial hospitality properties and extends credit to select entrepreneurial businesses through a licensed lending subsidiary. DPW Holdings, Inc.’s headquarters is located at 201 Shipyard Way, Suite E, Newport Beach, CA 92663; www.DPWHoldings.com.

Forward-Looking Statements

The foregoing release contains “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” or similar expressions. Statements that are not historical facts are forward- looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors. More information, including potential risk factors, that could affect the Company’s business and financial results are included in the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s Forms 10-K, 10-Q and 8-K. All filings are available at www.sec.gov and on the Company’s website at www.DPWHoldings.com.